European Central Banker to face prosecution in Latvia

International News

Jun 28, 2018

By CARLO PIOVANO, Associated Press
RIGA, Latvia (AP) — The Latvian official on the European Central Bank’s top policymaking board will be prosecuted for bribery in a scandal that has highlighted the EU country’s problems with corruption and money laundering.
The Latvian prosecutor-general’s move on Thursday follows four months of investigation into Ilmars Rimsevics, the head of the country’s central bank who was first questioned in February over taking bribes.
Rimsevics denies all wrongdoing and his lawyer declined to comment Thursday. Rimsevics has in the past said he is the target of a smear campaign by commercial banks.
The Associated Press has reported one banker’s tale of being asked repeatedly by Rimsevics for bribes and also to launder money from Russia. The allegations raised questions about foreign influence of a key European official, and Latvian secret services are investigating that link.
Rimsevics has had his access to state secrets revoked and is barred from carrying out his job. He cannot, however, be fired by the government because the central bank is politically independent.
Because Rimesvics is on the ECB’s top policymaking board, his case has gained international significance. Worried about not being able to function properly with a board member missing, the ECB has asked the European Court of Justice to rule on whether Rimsevics should be allowed to continue in his job while not convicted of a crime.
The ECB declined to comment Thursday. Its president, Mario Draghi, said earlier this month that “the ECB isn’t taking any side in this,” but is trying to make sure it can function properly.
Prosecutors in Latvia, a tiny Baltic state that’s a member of the European Union and NATO, also charged another individual, left unnamed, with supporting the bribe-taking. Latvian public TV said the individual was businessman Maris Martinsons, citing his lawyer, Didzis Vilemsons, as confirming that.
The questions surrounding Latvia were deepened by the U.S. government’s accusations in February that a Latvian bank proactively laundered money from countries like Russia and North Korea, helping them to evade sanctions, among other things. It said the bank, ABLV, also bribed officials in Latvia to be able to carry out its dirty transactions.
The report caused ABLV to collapse within days and pushed the Latvian government to clean up its financial sector by banning foreign shell companies from having bank accounts in Latvia. Experts say the plan is ambitious but are divided on its chances of success. They say Latvia already has strong anti-money laundering laws, but that they are not enforced properly.
In a sign of the issue’s importance to the U.S., the American government is sending officials to Latvia to review its efforts to fix its financial system.